Should government sack 50% of civil servants?

At the Second Annual Capital Market Retreat in Warri, the CBN Governor, Lamido Sanusi, made a strong case against the current dedication of about 70% of national income to purely consumption by civil servants and politicians, who comprise less than 1% out of our population of over 160 million.

In support of his advocacy, Sanusi suggested five areas in which recurrent expenditure can be reduced. First, he recommended downsizing the legislature and the related bloated salaries and allowances; secondly, he faulted “wastage of funds for the maintenance of 774 local government council chairmen and their aides”, and consequently, suggested the removal of this third tier of governance.

Thirdly, he queried the need for 36 state governments, some of which are unviable; Sanusi also insisted on total removal of fuel subsidy, and finally recommended that, “you have to fire half of the civil service, because the revenue government has is supposed to be for 167 million Nigerians.”

In reality, if we genuinely desire infrastructural enhancement, it will be difficult to oppose Sanusi’s overriding objective of redressing the current budget imbalance in favour of capital expenditure. Not surprisingly, however, pressure groups from those sectors, which would be adversely impacted, have all come out with ‘gun blazing’ attacks on these recommendations!

Hon. Victor Ogene, Deputy Chairman, House of Representatives Committee on Media and Public Affairs, has countered that Sanusi lacks the moral right to call for reduction in either the size of parliament or indeed, of the staff strength of the civil service, since the size of CBN staff has increased by over 20% to over 6000 since Sanusi became Governor.

Consequently, Ogene recommended that Sanusi should first clean up CBN’s Augean stable, in which an annual budget of over N300bn is expended without any legislative approval or oversight authority to ensure transparency and accountability!

The Trade Union Congress President, Peter Esele, on the other hand, maintains that “all the overhead that the Governor is talking about go to the politicians”.

The President of the Nigerian Labour Congress, Abdul Waheed Omar, in his reaction, warned on the excessive burden that the sack of 50% of civil servants will add to the already suffocated unemployment market, and therefore reminded Sanusi that “governance is about improving the quality of lives of the people and not the destruction of productive lives”.

Omar concluded that the suggestion for scrapping of Local Government Councils in a country that runs a federal system “is an indication of how unknowledgeable and unfit Sanusi is as a public office holder”.

Paradoxically, all the above vociferous critics of Sanusi’s recommendations would, nonetheless, agree on the obnoxious level of the cost of governance in Nigeria, but every one of these critics would stoutly resist any reduction to whatever benefits their constituencies enjoy under the current crippling dispensation. Governor Uduaghan of Delta State advised that before any rational government could take such rash decision for mass sacking, it must develop infrastructure that would attract investors.

In reality, Uduaghan’s observation on the need for an enabling environment is probably the most constructive so far; the issue of a lean and more efficient civil service structure without further jeopardising the oppressive unemployment rate in the country, can indeed, best be achieved with inflation and interest rates in the lower single digit range.

Besides reduction in waste, corruption and deliberate duplication in governance should certainly be a necessary first step in any serious attempt to reduce recurrent expenditure.

Fortunately, however, even if the policies and public comments of the Central Bank Governor reflect an anti-social mindset, it is still undoubtedly within Sanusi’s powers to create an enabling environment for industries to thrive, for employment opportunities to increase and for social welfare to improve.

The critical variables of inflation, interest rates, stable purchasing power, and exchange rate are within the purview of CBN’s core mandate of price stability, which is currently made unattainable by recurring systemic excess cash.

Paradoxically, the ‘curse’ of excess liquidity is deliberately sustained with CBN’s anti-people monetary payment model, which entails substitution of bloated naira allocations for dollar denominated revenue. In reality, Sanusi could successfully demonstrate his commendable passion for economic regeneration and improvement in social welfare of the masses, if he subscribes to a constitutionally compliant payments model, which adopts dollar certificates for payment of monthly allocations of dollar-derived revenue to constitutional beneficiaries.

Incidentally, such payments reform will simultaneously dry up the systemic cash surfeit that funds corruption and waste in governance, and naturally predicate more efficient resource management.

The positive economic and social transformation that this will bring about in our economy will become evident even before Sanusi’s current term expires, and will remain sustained for the benefit of all Nigerians for years thereafter.